AWF shareholders vote

AWF Group shareholders today voted their approval for the company’s $36 million acquisition of white collar labour hire business Madison Group in New Zealand.

The approval paves the way for AWF to complete the acquisition of Madison on 2 December 2013 to create a group generating revenues of approximately $200 million, almost 3 times the sales of any other recruitment company in New Zealand. Madison is forecast to lift AWF underlying after tax earnings1 from $5.4 million in the year to 31 March 2013 to approximately $8.0 million in 2015. Earnings per share are forecast to rise from 20cps in 2013 to 30cps in 2015.

AWF chairman Ross Keenan said, “We are delighted shareholders have approved this acquisition. It will provide AWF with a major strategic presence within the white collar recruitment and contracting sector.”

AWF chief executive Mike Huddleston said, “We have been searching for the right opportunity to expand from the blue collar sector into white collar recruitment for some time as our clients have been telling us they wanted a one-stop-shop solution. Madison was the natural progression.

“Since we announced our intention to acquire Madison there has been a significant level of excitement among our clients and prospects about the opportunities the one stop shop will create. AWF and Madison have already been asked to jointly present to one of the country’s major businesses and we are looking forward to a bright future together.”

AWF will acquire Madison for a maximum purchase price of $36 million, comprising: $30 million to be paid at completion and an additional payment of up to $6 million which is payable subject to the earnings of Madison’s business for the 52 weeks following 4 November 2013 exceeding certain thresholds. Madison is currently on track to achieve these thresholds.

The acquisition will be funded by debt and will lift AWF’s borrowings to $30 million in the first year following the acquisition with the potential to lift to $36 million after November 2014, assuming Madison hits its target expectations.